Time Warner is expanding its cable subscriber footprint, announcing today that it has reached a definitive agreement to acquire midwest cable operator Insight Communications for $3 billion in cash. Insight has about three quarter of a million customers throughout Kentucky, Ohio, and Indiana; the majority subscribe to cable television services, but over half a million subscribe to home broadband services, and more than a quarter million subscribe to voice services as well.
Time Warner currently has about 12 million residential video customers, almost 10 million high-speed data subscribers, and 4.4 million voice customers.
“We believe in our business and its long-term prospects and have long thought that Insight’s well-run, technologically advanced systems would fit well with our Midwest operations,” said Time Warner Cable CEO and chairman Glenn Britt, in a statement.
Insight is one of the nation’s ten largest cable operators; it’s currently owned by a series of private equity firms, including the Carlyle Group, Crestview Partners, and MidOcean Partners, along with members of Insight’s management and executive teams.
Time Warner expects the deal will enable the company to save about $100 million a year through cost reductions, with the majority of those savings being realized within two years of the deal closing. The deal market continued consolidation in the cable business as it works to increase efficiency and profit margins as consumers seem increasingly willing to dispense with pay TV in favor of online video offerings.